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INSOL Hong Kong 2014

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APRIL-JUNE 2014 || AUSTRALIAN INSOLVENCY JOURNAL 41

Scott Atkins reports on INSOL’s Annual Asia Pacific Conference held in Hong Kong in March.

Sold out months in advance and attended by a record 684 delegates drawn from over 44 countries, it’s no surprise that INSOL Hong Kong was the most successful Annual Regional Conference ever staged by INSOL. Over 100 Australian delegates made the trip to Hong Kong, which is one of the strongest Australian attendances at any INSOL conference.

CONFERENCE HIGHLIGHTS

So what made the conference so special? First, as an important centre of global business and finance, Hong Kong was an inspired choice of location for a conference on international insolvency and restructuring. Second, the technical content of the conference was highly relevant and consistently excellent.

Third, the networking opportunities were exceptional. Fourth, an additional 13 practitioners were appointed as Fellows of INSOL, including Australia’s ninth Fellow, Leonard McCarthy (partner, Henry Davis York and ARITA member). In addition, I was appointed to the INSOL Board, joining Fellow ARITA Board Member Mark Robinson, who is Vice President and Treasurer of INSOL.

For two days prior to the official start of the conference, INSOL ran its usual ancillary program. The Offshore Ancillary meeting was especially popular given the intense interest in funds (of all varieties), many of which are incorporated in the Cayman Islands or British Virgin Islands, but operate in Hong Kong as investment vehicles.

The conference proper began with a captivating keynote address by Mr Mike Smith, CEO of ANZ, entitled ‘The global financial crisis, the Asian century and the transformation of finance’. Smith was then interviewed on stage by the international TV broadcast journalist Ali Moore.

Some of the topics covered in the technical sessions over the next two days (many of which consisted of panels with ARITA representation) were:

  • similarities and differences between Chinese and other bankruptcy and restructuring systems
  • restructuring in Asia-Pacific and the role of the chief restructuring officer
  • the implementation of the UNCITRAL Model Law on Cross-Border Insolvency across Asia
  • challenges arising from European sovereign debt and the restructuring of European banks (with special insights about the challenges in Ukraine).

EMERGING THEMES

Three themes that emerged from INSOL Hong Kong are:

1. Cracks are starting to emerge in the Chinese banking system – for the first time, insolvency practitioners working in the region are being retained on genuine insolvency and restructuring engagements for distressed or failed Chinese enterprises.

2. The rise and rise of funds – in the past, hedge funds often generated attractive returns through passive investments in distressed debt. But the increase in the number of funds following that path, coupled with an environment of below-average default rates, has compressed returns.

This phenomenon has fuelled the desire of funds to become more active in restructurings and to extend their geographical reach as a means to generate higher returns. And as this growth has occurred, many are asking rhetorically what this means for the traditional role that banks have played in the restructuring space (that is, they may no longer hold the controlling hand).

3. The shift from west to east – whether this is the Asian century or not, it’s clear particular Asian centres – including Hong Kong, Singapore and Shanghai – are globally significant players in the financial system, and will become significant in the restructuring and insolvency space.

You can download conference papers from INSOL’s website: insol.org
 

Author

Scott Atkins

Partner

61 411 441 234

61 2 9947 6059

scott.atkins@hdy.com.au

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